The Challenge: Traditional payment methods are deeply embedded, restricting policyholders from selecting their preferred payment options.
The Solution: Empowering claimants with their preferred payment methods adds greater convenience, appeals to multiple demographics, and boosts overall satisfaction.
For property and casualty insurers, retention is heavily influenced by customer satisfaction, particularly because policyholders typically engage with their insurance carriers only once or twice a year. This is in stark contrast with other financial-service industries such as banking, where customer interactions take place ten to 20 times more often. Keeping new and current customers satisfied is largely dependent on the claim payment experience, with 58% of unsatisfied claimants citing delayed claim payments as a key frustration. Policyholders expect a fast, seamless claim experience with the latest payment options — making speed and the ability to select how they’re paid a key competitive differentiator.
The traditional method of paying insurance claims by check largely contradicts these expectations. In a world of instant gratification, waiting five to seven days for a check to arrive in the mail can greatly hinder customer relations. Checks also continue to be the payment method most vulnerable to fraud, with 65% of organizations facing check fraud attacks in 2023.
While ACH transfers improve speed to just two to four days, digital disbursements can deliver funds to claimants within minutes. According to a Visa Direct survey, 82% of consumers favor real-time payment options over waiting for a check. Plus, digital claim payments allow for 24/7 access, providing unmatched convenience that satisfies claimants with little involvement from claim staff.
Because timely claim payments are so connected to customer satisfaction — whether for natural disaster recovery, theft replacement, or other urgent needs — efficient digital payment solutions can significantly enhance customer relationships. By empowering claimants with multiple payout options, including instant claim payouts and same-day bank transfers, insurers can cater to diverse preferences and strengthen loyalty.
When it comes to payments, there’s a distinct divide in generational preferences. A recent Carat Insights study found that older Americans often seek security (40%), while millennials emphasize the speed of payment delivery (29%). For older generations, receiving a payout through traditional banking methods is the norm. In contrast, millennials and Gen-Z are more accustomed to digital wallets and instant payout methods.
This generational divide highlights a pivotal opportunity for insurers. Currently, only 38% of policyholders have received a payout digitally, with many unaware that alternatives to paper checks exist. By expanding payment choices, insurers can create a more tailored claim experience that enhances customer loyalty.
Meeting customers where they are means recognizing their diverse lifestyles and generational preferences. Payment choice empowers insurers to align with these individual needs, creating a more personalized experience. By offering a range of claim payment options such as mobile wallets, direct deposits, and traditional checks, insurers can cater to a wide range of demographic preferences—from tech-savvy millennials to security-focused retirees.
This flexibility not only enhances convenience but also builds trust, as customers feel their unique financial situations and preferences are understood and valued. By embracing payment choice, insurers can transform the claim process into a seamless experience that resonates with today’s digitally driven consumers.
Looking to empower your claimants with payment choice? Contact us to discover how our fully digital payment experience makes it simple for claimants with flexible, self-service payment options, including digital and revenue-generating methods.